UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q

              Quarterly Report Pursuant to Section 13 or 15(d) of
                      the Securities Exchange Act of 1934

                For the quarterly period ended October 31, 1996

                        Commission file number 000-23250

                              MARKET AMERICA, INC.
             (Exact name of registrant as specified in its charter)

         North Carolina                                         56-1784094
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                           Identification Number)

                           7605-A Business Park Drive
                           Greensboro, North Carolina
                    (Address of principal executive offices)

                                     27409
                                   (Zip Code)

                                 (910) 605-0040
              (Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

          Yes    X                                 No
               -----                                   -----


                      APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock as of October 31, 1996.

                                   19,950,000

<PAGE>


                                     PART I



ITEM 1     Statement of Financial Position as of
           October 31, 1996 and April 30, 1996

           Statement of Operations for the Three and Six
           Month Periods Ended October 31, 1996 and 1995

           Statement of Changes in Stockholders' Equity
           for the Three Month Periods Ended October
           31, 1996 and 1995

           Statement  of Cash  flows for the Three and Six Month  Periods  Ended
           October 31, 1996 and 1995

           Notes to Financial Statements as of October
           31, 1996



<PAGE>

MARKET AMERICA, INC.             Statement of Financial Position as of
                                 October 31, 1996 and April 30, 1996
-----------------------------------------------------------------------

<TABLE>
<CAPTION>
                                           (Unaudited)
                                           October 31,       April 30,
ASSETS                                         1996            1996
------                                     -----------     ------------
<S>                                        <C>              <C>        
CURRENT ASSETS
  Cash                                     $13,580,725      $10,455,908
  Advances to employees                         21,364            8,600
  Interest receivable                                             1,236
  Notes receivable, employees                   68,670           58,379
  Inventories                                1,113,560        1,020,117
  Prepaid expenses                               9,167           17,147
                                           -----------      -----------
      Total current assets                  14,793,486       11,561,387
                                           -----------      -----------
PROPERTY AND EQUIPMENT
  Furniture and equipment                      678,076          588,455
  Software                                     128,840          128,840
  Leasehold improvements                         2,570            2,570
                                           -----------      -----------
      Total property and equipment             809,486          719,865
  Less accumulated depreciation                229,966          176,966
                                           -----------      -----------
      Net property and equipment               579,520          542,899
                                           -----------      -----------
OTHER ASSETS
  Investments                                                   130,000
  Deposits                                         681              681
  Notes receivable, employees                                     3,317
                                           -----------      -----------
      Total other assets                           681          133,998
                                           -----------      -----------
TOTAL ASSETS                               $15,373,687      $12,238,284
                                           ===========      ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
  Accounts payable                         $ 1,421,504      $ 1,024,429
  Sales and payroll taxes payable              176,045          233,515
  Commissions payable                        1,159,244        1,842,806
  Accrued compensation                          70,053          376,746
  Notes payable, related party                 177,623          292,714
  Current portion of obligation
    under capital lease                          3,218            2,921
  Current portion of notes payable             251,399          240,970
  Income taxes payable                       1,193,046        1,372,978
                                           -----------      -----------
      Total current liabilities              4,452,132        5,387,079
                                           -----------      -----------
LONG-TERM DEBT, including capital lease
  obligation, net of current portion           318,810          324,355
                                           -----------      -----------
UNEARNED REVENUE                               604,663          357,101
                                           -----------      -----------
STOCKHOLDERS' EQUITY
  Common stock, $.00001 par value;
   800,000,000 shares authorized;
   19,950,000 issued and outstanding               199              199
  Additional paid-in capital                    39,801           39,801
  Retained earnings                          9,958,082        6,129,749
                                           -----------      -----------
      Total stockholders' equity             9,998,082        6,169,749
                                           -----------      -----------
TOTAL LIABILITIES AND
  STOCKHOLDER'S EQUITY                     $15,373,687      $12,238,284
                                           ===========      ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

<PAGE>

MARKET AMERICA, INC.                          Statement of Operations for the
                                              Three and Six Month Periods Ended
                                              October 31, 1996 and 1995
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                             Three Month Periods Ended  Six Month Periods Ended
                             -------------------------  -----------------------
                             October 31,  October 31,  October 31,  October 31,
                                 1996         1995         1996         1995
                             -----------  -----------  -----------  -----------
<S>                          <C>          <C>          <C>          <C>        
SALES                        $15,498,785  $10,092,046  $31,183,453  $17,578,053
COST OF SALES                  2,755,257    1,941,177    5,724,139    3,729,383
                             -----------  -----------  -----------  -----------
GROSS PROFIT                  12,743,528    8,150,869   25,459,314   13,848,670
                             -----------  -----------  -----------  -----------
OPERATING EXPENSES
  Commissions                  7,261,106    4,666,593   14,275,380    8,003,543
  Salaries and wages             764,559      330,256    1,632,582      590,663
  Taxes                          156,784       75,286      297,041      185,841
  Advertising                      3,439       31,339        8,420       31,939
  Travel/entertainment            76,335       54,820      334,277      108,836
  Consulting                      79,200       77,010      199,720      579,206
  Freight                        806,084      359,339    1,515,503      671,791
  Professional fees              199,808       66,415      314,415      266,877
  Office                          60,338       53,253      142,196      125,005
  Insurance                       74,029       26,292      135,181       43,112
  Rent                           119,300       52,144      169,515       76,103
  Telephone/utilities             69,595       96,150      114,812      139,548
  Depreciation and
    amortization                  27,224       20,709       52,478       34,684
  Interest                         6,923       49,649       16,431       54,929
  Leases                          16,564        3,279       24,924       11,733
  Cleaning/maintenance            54,211        8,892       70,408       26,559
  Bad debts                       28,824       12,107       75,177       16,791
  Miscellaneous                    2,004       33,090        2,951       76,719
                             -----------  -----------  -----------  -----------
      Total operating
        expenses               9,806,327    6,016,623   19,381,411   11,043,879
                             -----------  -----------  -----------  -----------
INCOME FROM
  OPERATIONS                   2,937,201    2,134,246    6,077,903    2,804,791
                             -----------  -----------  -----------  -----------
OTHER INCOME (LOSS)
  Interest                      131,032       49,382      244,030       86,902
  Miscellaneous                  11,109       12,255       71,611       15,932
  Loss on sale of
    assets                                                 (4,595)
                             -----------  -----------  -----------  -----------
      Total other
        income                   142,141       61,637      311,046      102,834
                             -----------  -----------  -----------  -----------
INCOME BEFORE
  INCOME TAXES                 3,079,342    2,195,883    6,388,949    2,907,625

PROVISION FOR FEDERAL/
 STATE INCOME TAXES            1,245,288      815,699    2,560,616    1,097,636
                             -----------  -----------  -----------  -----------

NET INCOME                   $ 1,834,054  $ 1,380,184  $ 3,828,333  $ 1,809,989
                             ===========  ===========  ===========  ===========

NET INCOME PER SHARE         $       .09  $       .07  $       .19  $       .09
                             ===========  ===========  ===========  ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

<PAGE>

MARKET AMERICA, INC.                      Statement of Changes in Stockholders'
                                          Equity for the Three Month Periods
                                          Ended October 31, 1996 and 1995
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                            Common Stock    Additional
                      ---------------------   Paid-In    Retained
                        Shares      Amount    Capital    Earnings      Total
                      ----------   --------  ---------   --------      -----

<S>                   <C>            <C>      <C>       <C>          <C>       
Balances at
July 31,
1995                  19,950,000     $199     $39,801   $1,406,327   $1,446,327

Net income                                               1,380,184    1,380,184
                      ----------     ----     -------   ----------   ----------

Balances at
October 31,
1995                  19,950,000     $199     $39,801   $2,786,511   $2,826,511
                      ==========     ====     =======   ==========   ==========

Balances at
July 31,
1996                  19,950,000     $199     $39,801   $8,124,028   $8,164,028

Net income                                               1,834,054    1,834,054
                      ----------     ----     -------   ----------   ----------

Balances at
October 31,
1996                  19,950,000     $199     $39,801   $9,958,082   $9,998,082
                      ==========     ====     =======   ==========   ==========
</TABLE>


   The accompanying notes are an integral part of these financial statements.

<PAGE>

MARKET AMERICA, INC.                          Statement of Cash Flows For the
                                              Three and Six Month Periods Ended
                                              October 31, 1996 and 1995
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                   Three Month Periods Ended  Six Month Periods Ended
                                   -------------------------  -----------------------
                                   October 31,  October 31,  October 31,  October 31,
                                      1996         1995         1996         1995
                                   -----------  -----------  -----------  -----------
<S>                                <C>           <C>         <C>           <C>       
CASH FLOWS FROM
 OPERATING ACTIVITIES
  Net income                       $ 1,834,054   $1,380,184  $ 3,828,333   $1,809,989
  Add items not requiring use
   of cash
    Depreciation and amortization       27,746       20,709       53,000       34,684
    Consulting fees for note payable                                          400,000
  (Increase) in advances to employees   (9,264)     (13,570)     (12,764)     (30,090)
  (Increase) decrease in notes
    receivable to employees            (37,177)                   (6,974)
  Decrease in interest receivable                                  1,236
  (Increase) decrease in inventories   445,848      (99,302)     (93,443)    (375,547)
  (Increase) decrease in prepaid
    expenses                            (4,522)      32,831        7,980       (3,786)
  Increase (decrease) in accounts
    payable                            227,901      (22,088)     397,075      248,331
  Increase (decrease) in
    taxes payable                      (95,571)     665,967     (237,402)     551,782
  Increase (decrease) in
    commissions payable                110,500      202,900     (683,562)     289,150
  Increase (decrease) in accrued
    compensation                        17,578        6,076     (306,693)     (87,494)
  Increase (decrease) in unearned
    revenue                             62,038     (190,612)     247,562     (152,772)
  (Decrease) in interest payable                                               (7,109)
                                   -----------   ----------  -----------   ----------
      Net cash provided from
        operating activities         2,579,131    1,983,095    3,194,348    2,677,138
                                   -----------   ----------  -----------   ----------
CASH FLOWS FROM INVESTING
 ACTIVITIES
  Purchase of furniture and
    equipment                          (56,228)    (144,731)     (89,621)    (165,177)
  Decrease in deposits                                5,500                     5,500
  Sale of investments                                            130,000
                                   -----------   ----------  -----------   ----------
      Net cash provided (used) from
        investing activities           (56,228)    (139,231)      40,379     (159,677)
                                   -----------   ----------  -----------   ----------
CASH FLOWS FROM FINANCING
 ACTIVITIES
  Increase (decrease) in advances
    from shareholders                    3,505                  (115,091)
  Reduction in obligations under
    capital lease                       (1,389)                   (1,389)
  Increase (decrease) in notes
    payable                             19,527      (59,631)       6,570      (60,396)
                                   -----------   ----------  -----------   ----------
      Net cash provided (used) from
        financing activities            21,643      (59,631)    (109,910)     (60,396)
                                   -----------   ----------  -----------   ----------
TOTAL INCREASE IN CASH               2,544,546    1,784,233    3,124,817    2,457,065

CASH AT BEGINNING OF PERIOD         11,036,179    3,502,872   10,455,908    2,830,040
                                   -----------   ----------  -----------   ----------
CASH AT END OF PERIOD              $13,580,725   $5,287,105  $13,580,725   $5,287,105
                                   ===========   ==========  ===========   ==========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

<PAGE>

MARKET AMERICA, INC.                          Statement of Cash Flows For the
                                              Three and Six Month Periods Ended
                                              October 31, 1996 and 1995
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                   Three Month Periods Ended  Six Month Periods Ended
                                   -------------------------  -----------------------
                                   October 31,  October 31,  October 31,  October 31,
                                      1996         1995         1996         1995
                                   -----------  -----------  -----------  -----------
<S>                                 <C>           <C>        <C>            <C>     
SUPPLEMENTAL INFORMATION
  Income taxes paid in cash         $1,336,364    $133,667   $2,728,234     $546,633
                                    ==========    ========   ==========     ========

  Interest paid in cash             $   17,173    $  3,031   $   26,297     $  6,249
                                    ==========    ========   ==========     ========
</TABLE>


   The accompanying notes are an integral part of these financial statements.


<PAGE>

MARKET AMERICA, INC.                            Notes to Financial Statements
                                                As of October 31, 1996
-------------------------------------------------------------------------------


The financial  statements of Market America,  Inc.,  included herein,  have been
prepared without audit,  pursuant to the rules and regulations of the Securities
and Exchange  Commission.  Although  certain  information  normally  included in
financial  statements  prepared in accordance with generally accepted accounting
principles has been condensed or omitted, Market America, Inc. believes that the
disclosures are adequate to make the information presented not misleading. These
financial statements should be read in conjunction with the financial statements
and notes thereto  included in Market  America's  annual report on Form 10-K for
the fiscal year ended April 30, 1996.

The  financial   statements   included  herein  reflect  all  normal   recurring
adjustments  that,  in the  opinion  of  management,  are  necessary  for a fair
presentation.  The results for interim periods are not necessarily indicative of
trends or of results to be expected for a full year.



<PAGE>



ITEM 2      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS

As of May 1, 1996,  Market  America,  Inc.,  coming  off a record  year of sales
growth,  net income after tax,  and earnings per share of $.26,  began its fifth
year of  operations.  The  Company's  sales have grown from  $1,321,874 in 1993,
$9,931,946 in 1994, and  $19,592,056 in 1995, to $42,479,911  for the year ended
April 30,  1996.  The sales for the first  quarter  ended  July 31,  1996,  were
$15,684,671,  an increase  over the first  quarter ended July 31, 1995, of 110%.
The sales for the second quarter ended October 31, 1996,  were  $15,498,785,  an
increase over the second  quarter  ended October 31, 1995, of 54%.  Earnings per
share have grown  consistently from $0.011 for the fiscal year of 1994, to $0.04
for the fiscal year of 1995,  and to $0.26 for the fiscal year ending  April 30,
1996.  Earnings  per share for the  quarter  ended July 31,  1996,  were  $0.10,
representing a 400% increase over the quarter ended July 31, 1995.  Earnings per
share for the quarter ended October 31, 1996,  was $.09,  representing  a 28.98%
increase over the quarter ended October 31, 1995. In regard to liquidity,  as of
October 31, 1996, current assets exceeded current liabilities by $10,341,354 for
a current ratio of 3.33 to 1.

The Company has been  successful in the selection of market driven  products for
distribution  through its ever-growing  network of  "UnfranchiseTM"  independent
contractors known as Market America, Inc. Business Development Centers. Products
currently  leading  in  consumer  popularity  are  in  the  growing  markets  of
preventive  health/homeopathic  type  nutritional food supplements that focus on
antioxidants. In addition, alternative home care, home maintenance type products
that are enzyme-based,  chemical free and environmentally cohabitant are growing
in popularity;  specifically in stain removal, drain and pool cleaners and plant
additives  that  enhance  growth.  Moving  into the holiday  season,  management
expects that the  reorganized  line of jewelry  will  enhance the third  quarter
sales.  The Company's  product focus will continue to be on consumables that are
highly market driven. Implementation has begun to compound the current growth of
product  sales by the use of One to One  Marketing.  This is  expected  to build
customer  loyalty  through  relationships   cultivated  to  increase  "share  of
customer".  The philosophy is fairly simple,  yet complex for other companies to
implement.  Through collaboration  between supplier,  manufacturer and customer,
customer  share  (the  amount of  dollars  expected  to be spent each month by a
customer through an "UnfranchiseTM") will dramatically increase. Market America,
Inc.,  plans  to  compile   accurate   information  that  will  allow  for  mass
customization  of  products  and  services  for  customers.  That is,  supplying
products that customers  actually want in a convenient,  enjoyable,  time saving
environment that will be competitively priced.


<PAGE>


ITEM 2      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS - continued

New  visibility  and image  enhancement  programs  have been put into  place for
Market  America,  Inc.,  with the  establishment  of a world wide web site.  The
Company    welcomes    the    world   to   visit    its    site    address    at
WWW.MarketAmericaUSA.Com.  This  combines  with  the  Company's  ongoing  public
relations  campaign that is expected to improve on the already  steady growth of
new Market America, Inc.,  "UnfranchisesTM" that average one new "UnfranchiseTM"
opening every 15 minutes of every day.

To date, the geographic areas that have experienced  phenomenal growth of Market
America, Inc. Independent  Distributorships have been those areas that developed
meeting,  training,  and  seminar  systems.  Management  has  begun  to see  the
development of these systems west of the Eastern Seaboard and expects to realize
the same type of growth as the National  Meeting,  Training,  and Seminar System
(NMTSS)  expands  throughout  North  America  in the  last  quarter  of 1996 and
throughout 1997.

Finally,  Market America,  Inc.'s NMTSS provides distributors  everywhere with a
standardized,  coordinated,  and comprehensive business introduction,  training,
motivational, and support system. Meetings are coordinated, publicized, and held
in every geographical location where there is distributor organizational growth.
The NMTSS is comprised of business briefings,  training sessions,  seminars, and
conventions.  Utilizing  this system allows every  distributor  access to expert
speakers and trainers within Market America, Inc., and provides a means to build
"UnfranchisesTM" anywhere throughout US, Canada and the Caribbean.


<PAGE>


                                    PART II

ITEM 1      LEGAL PROCEEDINGS

During the period covered by this report,  no legal  proceedings  required to be
reported became reportable events, and there were no material developments in or
terminations of previously reported proceedings.

ITEM 2      CHANGES IN SECURITIES

            NONE


ITEM 3      DEFAULTS UPON SENIOR SECURITIES

            NONE


ITEM 4      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

            NONE


ITEM 5      OTHER INFORMATION

            NONE


ITEM 6      EXHIBITS AND REPORTS ON FORM 8-K

            (a) EXHIBITS

            The exhibits to this report are listed in the Exhibit
            Index, which is incorporated herein by reference.

            (b)  REPORTS ON FORM 8-K

                 NONE

<PAGE>


--------------------------------------------------------------------------------
                                   SIGNATURES
--------------------------------------------------------------------------------


     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.


                                        MARKET AMERICA, INC.
                                        (Registrant)




                                        -----------------------------
                                        James H. Ridinger,President
                                        and CEO






                                        -----------------------------
                                        Edward W. Faulkner, Controller

<PAGE>

                              MARKET AMERICA, INC.

                              EXHIBITS TO FORM 10-Q

                                  EXHIBIT INDEX



Exhibit
Number                              Identification
-------                             --------------

   2(1)     Agreement and Plan of Merger dated as of October 1, 1993 between
            Atlantis Ventures, Inc. and Market America, Inc. and Addendum
            (to same) dated October 1, 1993 (incorporated by reference to
            Exhibits 2.1 and 2.2, respectively, to the Company's Current Report
            on Form 8-K filed October 6, 1993, Commission File No. 000-23250)

3(i)(1)     Articles of Incorporation of the Company (incorporated by
            reference to Exhibit 3.1 to the Company's Current Report on
            Form 8-K filed with the Commission on November 3, 1993, Commission
            File No. 000-23250)

3(i)(2)     Articles of Amendment of the Company (incorporated by reference to
            Exhibit 3.3 to the Company's Annual Report on Form 10-K filed with
            the Commission on July 30, 1996, Commission File No. 000-23250)

  3(ii)     By-Laws of the Company (incorporated by reference to Exhibit 3.4 to
            the Company's Annual Report on Form 10-K filed with the Commission
            on July 30, 1996, Commission File No. 000-23250)

   4(1)     Article 2 of the Articles of Incorporation of the Company
            (incorporated by reference to Exhibit 3(i) to the Company's
            Current Report on Form 8-K filed with the Commission on
            November 3, 1993, Commission File No. 000-23250)

   4(2)     Articles of Merger of Atlantis Ventures, Inc. and Market
            America, Inc. (incorporated by reference to Exhibit 2.3 to the
            Company's Current Report on Form 8-K filed with the Commission
            on November 3, 1993, Commission File No. 000-23250)

    27      Financial Data Schedule*
----------
*Filed herewith